Eye on Asia | How Bangladesh has surged past India on road to South Asian economic stardom
- Fiscal prudence, export industrialisation and policies such as the empowerment of women and girls have allowed Bangladesh to leapfrog India in per capita GDP and other indicators
- But even as the smaller neighbour outpaces the bigger one, untapped economic gains remain to be explored between the two
Agriculture used to contribute a third of Bangladesh’s GDP but fell to less than 15 per cent between 2010 and 2018, while industry’s contribution rose from less than a fifth to more than a third.
Bangladesh is expected to maintain its per capita GDP lead over India until 2026, owing to strong remittances, exports and agricultural growth. In 2020, India’s per capita GDP fell to US$1,929 from US$2,098, and economic output dropped to US$2.66 trillion from US$2.87 trillion. That same year, Bangladesh, a US$355 billion economy, overtook India with a per capita GDP of US$1,961 after attaining 6 per cent growth over the past 15 years.
Since 2004, Bangladesh’s GDP growth has been picking up but it was only in 2017, when India’s growth started falling, that it managed to outpace its bigger neighbour. Bangladesh’s per capita GDP stood at half of India’s before the 2008 debt crisis, but by 2014 that figure had grown to 70 per cent. Covid-19 caused India’s economy to contract by 7.3 per cent in 2020, while Bangladesh’s grew 3.5 per cent.
